Oriental Bank of Commerce (OBC) will soon lower deposit rates in some of the term buckets, its Chairman and Managing Director, S. L. Bansal, has said.
The bank’s asset-liability committee will meet next week to take a call on the issue, he added. Bansal, however, declined to comment on the likely time buckets where the rate revision may be effected.
One thing that is certain is that the bank is looking to only reduce deposit rates, not hike them.
OBC had, in mid-August, lowered its base rate by 10 basis points to 10.40 per cent, signalling that interest rates may have peaked. It had also reduced interest rates on term deposits of Rs 15 lakh and above.
NIM
Despite the revision in its lending and deposit rates, OBC is confident of achieving its net interest margin (NIM) guidance of 3 per cent for the current fiscal. It is also confident of meeting its net profit growth target of 20 per cent, Bansal said.
He said that the liquidity situation was quite good, but credit offtake had been somewhat muted.
Retail term deposit growth has been robust with year-on-year growth at 28 per cent.
Capital situation
On capital raising plans, he said that the bank was comfortable on the capital front, especially with tier-I capital at 9.92 per cent.
OBC has adequate room for raising tier-II capital and is looking to raise about Rs 800 crore before the end of the current calendar year.
“Our board has already approved this (tier-II plan) and we are waiting for the right market condition,” Bansal said.